Exchange and Development

Exchange and Development

An Anatomy of Economic Transactions

Peter A. Cornelisse and Erik Thorbecke

This innovative and important book develops a new framework for analysing exchange that takes place within and outside markets over the course of development.

Chapter 6: Systems of Exchange in Different Phases of Development

Peter A. Cornelisse and Erik Thorbecke

Subjects: development studies, development economics, economics and finance, development economics, institutional economics

Extract

OVERVIEW This chapter is concerned with exchange configurations in different phases of development. Even though the time dimension is prominent throughout the chapter, the approach adopted has mostly a comparative static nature. A truly dynamic approach is reserved for the next chapter, where a systematic description is presented of the various ways in which configurations evolve and of the forces that cause the change. The present chapter sets the stage for the dynamic approach of exchange configurations. A very broad distinction between different forms of exchange is the one between exchange in subsistence and in market economies. For most of history, since man left the hunting and gathering stage behind and settled down to concentrate on agriculture, subsistence-oriented exchange relations dominated. Section 6.2 presents the types of exchange relations prevailing in subsistence communities, while Section 6.3 discusses the emergence of markets and the spreading of market participation. The first part reviews some broad theories speculating on the conditions under which markets come into existence as a new phenomenon and on the ways in which whole communities move from community-based to market systems. The second part concentrates on the decisions for or against market participation among individual present-day rural households in developing countries. Finally, Section 6.4 presents and discusses the exchange configurations corresponding with three broad phases of development while paying special attention to the differences between the exchange elements in these phases and to the nature and focus of the apparent changes in them. 6.2 FORMS OF EXCHANGE IN SUBSISTENCE...

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